from the yeah,-that-seems-reasonable dept

Joe Mullin points us to a story of yet another ridiculous patent trolling lawsuit win. This involves a small company called Grail Semiconductor, who appears to have done nothing of note in the market... but did secure a patent (6,642,552 on "inductive storage capacitor") which it used to sue Mitsubishi Electric... leading to a jury awarding Grail an astounding $124 million. Update: As pointed out in the comments, and discussed below, the issue here came about more as a breach of contract issue, rather than a straight up patent lawsuit...

However, what's interesting is that the "Naples News" from Naples, Florida has posted a somewhat revealing profile of Grail's "CEO" who doesn't seem to have any actual experience in the field, but somehow was hired to run the company through the lawsuit process (even though he lives in Florida, and the company is in California -- I guess it doesn't matter where you live if you're just suing over patent infringement):

A University of Wyoming graduate, [Ronald] Hofer spent about three decades compiling an eclectic résumé of business interests — insurance in London, tourism in Algeria, fusion technology in the U.S., drilling in Nigeria. Four years ago, Hofer settled in North Naples, buying foreclosed homes as investment properties.

From there, the story says that he met the inventor who held the patent "through mutual business acquaintances overseas," and somehow was made CEO of Grail despite no actual experience or relevant connection to the company.

Of course, the real big break for the company was hiring Ray Niro to run their patent fight. Niro is the guy who inspired the term "patent troll" years back, and has a long history with these kinds of cases. Grail had tried with other law firms in the past -- and apparently had trouble paying its bills. As the article notes, "One firm is suing for about $2 million in unpaid fees. Another is seeking more than $2.3 million." But, still, Niro took the case, and likely stands to earn himself a nice commission if Grail can hold on through the appeals process.

Also, the article celebrating Hofer claims that Mitsubishi "stole semiconductor designs" from Grail back in 2001, though I'm curious if that's actually true, or if this is just another case of independent invention of an obvious progression in the art. Lots of reporters claim that anyone found guilty of patent infringement "stole" from the patent holder, when it's very rarely the case. Update: Aha, some more details on the case suggest that, indeed, Mitsubishi did establish a deal with the engineer, and then appears to have shared the information with subsidiaries -- so this isn't a garden variety independent invention situation.

Either way, what does seem clear is that Grail tried to do something in the market and was a complete flop. If we were in a real free market, it would go out of business and move out of the way while others innovated. Instead, it gets to hang on, and we have a system in which we reward the failures, and punish the successful companies who innovate. That is not a recipe for economic growth by any stretch of the imagination.

Looks to me like a pretty darn good engineer found a "business guy" to help him enforce his patent, made that guy the CEO (a rather standard business thing to do) of his little company and got hot shot Ray Niro to bring suit.

All said, regardless of whether or not anyone stole anything, this is your patent system working at its best.

With a nod to Yakov Smirnoff ...

Either way, what does seem clear is that Grail tried to do something in the market and was a complete flop. If we were in a real free market, it would go out of business and move out of the way while others innovated. Instead, it gets to hang on, and we have a system in which we reward the failures, and punish the successful companies who innovate. That is not a recipe for economic growth by any stretch of the imagination.

Re: Re: Where is the patent lawsuit?

I'm not sure the last paragraph of your blog is really fair. Just because a company fails doesn't mean the IP is released into public domain does it?

With your laudable updates to the available information, this seems much like this guy actually did invent something novel and new and Mitsubishi shared that with other people and now he is suing as is his right.

That is what the patent system is for is it not? Sure he used famed patent troll people, but that doesn't make him a patent troll does it?

Re: Re: Where is the patent lawsuit?

It's weird. I can find the lawsuit filed against Renesas, the company that owns part of Mitsubishi-Japan (in a joint venture with Mitsubishi), which is a straight up patent lawsuit, but that appears to be a different suit. Anyhow, I could easily see that Grail looked at what Mitsubishi-Japan was doing, felt they got the information that was disclosed to Mitsubishi Electric, and then sued both. Either way, I'll wait and see what the actual option says.

Re: Re:

Inventing a novel way to do/make something (for which you obtain a patent) and running a business successfully are two different things. Just because a company (Grail) has poor business execution does not mean that rights to their novel idea should be abandoned. If a company with savvy business expertise wants to capitalize on a good idea (that does not belong to them) then they should pay for it. Paying a royalty on a patented product/idea is not uncommon and has made many a inventor and company very wealthy. Unfortunately, a big company that tries to steal a novel idea form someone (especially when using their resources to just bury the inventor) is also not uncommon. That seems to be the case here - shame on Mitsubishi.

This is bullshit I'm thinking about suing everyone that's ever filed a lawsuit on a patent claim. I have a patent on suing people for patent abuse.

I just named it preventative measure and damage regulation of piracy,copyright,trademark, and patent infringement.

With a very long layout of the actions of extorting people for money well I don't exactly call it that.

If they let me have it ROFL! I'm going to to fucking troll the trolls so hard. It will work out great xD one of my pals just finished his law degree at Berkley.

After I win my millions I will donate the majority to causes that actually matter. Like hunger IN OUR OWN COUNTRY nothing personal against the rest of the world but it's best to clean up your own back yard first.

The second thing will be paying to have a methadone clinic built next to my house. Yeah I know lol but 4 hours of driving 6 days of week sucks, but on the bright side I'm high as a kite all day every day and always in a great mood. It also boost my work productivity however methadone shits are not fun. It's like being raped twice a month.

It's like thank god! it's time to bust loose and I walk in the bathroom like a fucking champ! Then I come out crying like a bitch. "not like this"

Well at least I can thank god I don't have to fly. Being raped twice a month is more than enough for me. Although I could use it as a opportunity if I did have to fly.

While you're up there do you mind busting up this turd that's been in the making for a good 17 days. Hell I still doubt it compares to them fat black chicks that work at the airports. They look like they could drop a load comparable with a elephant.

Then they wanna be like pfft it's not that bad.
BITCH YOU JUST SHAT 200 GALLONS! DO YOU KNOW WHAT WOULD HAPPEN IF THEY DROPPED THAT AT 30 THOUSAND FEET? It's going to fuck shit up!

Erm I got off track lol goddamn it :( too late now. Oh yea I remember when I troll the trolls and win my millions the drinks are on me!

Re: Re: Re: Where is the patent lawsuit?

That is indeed "what the patent system is for" and I'm not sure if he is a troll or not. If he was planning or attempted to practice his invention then he isn't really an NPE, and thus not a true troll.

To be sure, this is exactly the type of rare situation where the patent system actually accomplished some "good". Although the damages seem a bit on the high side...

Time to start making shit up and sue all who have not.IP = Imaginary Property !
Let's see what I can i make up and scribble on a paper like a 10 year old and then "Patent" my dumb idea so I can use it to become as rich as one of these slimeball patent trolls.
1.Pet feeding apparatus via standard TV remote control because I am to lazy to get off the couch.
2.Butt Wiping Toilet.Yuch..........I am sick and tired of wiping my own butt.And it is controllable via the Internet.

Re:

are you insane or just foolish?

you are literally saying that you support patent rights being used as a tax, forcing successful businesses to pay out the nose for "licensing" things that they created in-house just because someone claims they own the rights on all widgets that turn clockwise, despite never producing, licensing or innovating a thing themselves.

Promote the progress (of everyone)? no, no, the system is supposed to make "many a inventor and company very wealthy", right?

don't let them treat you like such a fool.

And stop saying IDEA. Patenting IDEAs is not just foolish, it is contrary to the law. a patent is meant to protect a very particular expression of an idea.

Re: Re: Re: Where is the patent lawsuit?

There are two lawsuits:
This lawsuit (the one with the $124M jury verdict) was in California State Court (Santa Clara County) for breach of contract (the NDA) and theft of trade secrets (the technology covered by the patent).
The patent lawsuit is in Federal Court in the Northern District of California (you cannot sue for patent infringement in State Courts), and is still in the early procedural stages.

Re: Re: Re: Where is the patent lawsuit?

zzzzzzzzzz

Another moronic anti patent story where the author is totally clueless about what was actually invented and assumes that it was just another run-of-the-mill semiconductor design and that large corporations should be free to steal trade secrets and infringe patents at will. Like any small company would not flop if a deep pocketed monolith set their sights on stealing its IP and decided to drive it out of business. Learn a new tune dipwad, your story has become tiresome.

zzzzzzzzzz

Another moronic anti patent story where the author is totally clueless about what was actually invented and assumes that it was just another run-of-the-mill semiconductor design and that large corporations should be free to steal trade secrets and infringe patents at will. Like any small company would not flop if a deep pocketed monolith set their sights on stealing its IP and decided to drive it out of business. Learn a new tune dipwad, your story has become tiresome.

zzzzzzzzzz

Another moronic anti patent story where the author is totally clueless about what was actually invented and assumes that it was just another run-of-the-mill semiconductor design and that large corporations should be free to steal trade secrets and infringe patents at will. Like any small company would not flop if a deep pocketed monolith set their sights on stealing its IP and decided to drive it out of business. Learn a new tune dipwad, your story has become tiresome.

Mullin's bias is showing

I understand Mullin thinks patent litigation should be a sport for only large corporations and is on a crusade against patent trolls. But, this case does not even appear to be a patent case. A start-up technology company in the SV signs an NDA with another company, the other company improperly uses the technology and then there is a lawsuit. I can't believe Mullin somehow tries to make an anti-troll story out of it.

We can all guess Mitsubishi was represented by a high powered law firm that did everything it can to punish the plaintiff for bringing this lawsuit. The case is a 2007 case - anyone here who is not backed by several billion dollars of revenues wants to fight a company like Mitsubishi in a lawsuit for 5 years?